10 Lessons for Entre­pre­neurs

“I was on holiday in Greece, reading all stories so that I could begin writing an intro­duc­tion. It was obvious: There is a pattern here. It’s more than just indi­vi­dual mistakes, there are beha­vioural patterns: 10 princi­ples for sustained success.” The 10 lessons are taken from the book “My Biggest Mistake”, by Niko­laus Förster.

Nikolaus Förster

Dr. Niko­laus Förster is one of the leading busi­ness jour­na­lists and entre­pre­neurs. In 2013, he took over Germany’s leading entre­pre­neur maga­zine “impulse” and founded his own publi­shing house. In 2009, he became “impulse” editor-in-chief.

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1. Listen to your inner voice!

How do you figure out what you really want? Espe­ci­ally in the hustle and bustle of ever­yday life, the inner voice often remains unheard – some­times with fatal conse­quences. Many entre­pre­neurs realise that at one stage they became unfaithful to their own values. For instance, the co-founder of the DIY chain OBI regrets that at the opening of a super­store in an emer­ging market he allowed bribe money to flow. Manfred Maus says: “Espe­ci­ally when you are under pres­sure, it is important to stick to your own values.” If you cease to be a role model, “the employees do not respect you anymore.”

2. Stay inde­pen­dent!

Whenever entre­pre­neurs lose their inde­pen­dence, for example due to liqui­dity shor­tages or dispute among the owners, it is a turning point. In retro­spect, those entre­pre­neurs regret having fallen into a mino­rity posi­tion or having been driven into an unde­sired depen­dency on finan­cial insti­tu­tions. It is temp­ting to take short- and medium-term loans from banks instead of gradually increa­sing equity. Entre­pre­neurs recom­mend finan­cing projects with personal money if possible. “Always secure a good cash flow, and try to work inde­pendently,” advises the Hamburg-based Edel-Music founder Michael Haentjes.

3. Grow orga­ni­cally!

Part of the DNA of most entre­pre­neurs is to develop and grow the company. This may take years, decades or even genera­tions. However, many entre­pre­neurs want to acce­le­rate this process and forge alli­ances with corpo­ra­tions to achieve much higher growth. After initial euphoria most of them were disil­lu­sioned. In retro­spect, they would rather prefer to have grown slowly. Their advice: Do not become mega­lo­ma­niac or the play­thing of others! Mustard manu­fac­turer Theo Hartl says: “Apply all your strength to your own company and brand.”

4. Be aware of diffe­rent cultures and menta­li­ties!

Facts and figures shape the image of economy. Many entre­pre­neurs focus on hard facts, for instance on syner­gies, market shares and prices, neglec­ting important cultural and mental diffe­rences. Expe­ri­enced entre­pre­neurs warn against narro­wing the view on numbers. Instead, focus on soft factors as well! Dowel producer Klaus Fischer for instance warns that a merger always brings a diffi­cult inte­gra­tion phase. There will always be “winners and losers”.

5. Do not conclude prema­ture deals!

Many entre­pre­neurs are very self-confi­dent, they impa­ti­ently long for new deals, making prema­ture deci­sions instead of judging the situa­tion soberly. This has led to fatal deci­sions. Expe­ri­enced entre­pre­neurs recom­mend ente­ring deeply into the matter and not to conclude from the past to the future. Trans­mis­sion manu­fac­turer Manfred Witten­stein urges others to be aware of this “path depen­dency in thin­king”. Moreover, those entre­pre­neurs warn to trust people too quickly. Many of them made deci­sions on the basis of alle­gedly good rela­tions with busi­ness part­ners until they realised that they had deceived them­selves.

6. Choose a partner care­fully!

Successful entre­pre­neurs depend on outstan­ding and trust­worthy employees and part­ners. But very often long-term compa­n­ions – even family members – alienate them­selves, friendships are broken, trust is abused. Many entre­pre­neurs have been disap­pointed. They quote Lenin: “Trust is good, but control is better.” However, knife manu­fac­turer Karl-Peter Born who was deceived by a close opera­tions manager for years warns that such an inci­dent must not lead to “the loss of trust in sincere, committed employees.” Instead it is important to pay more atten­tion to details and not to lose control of one‘s own company, for example by fast growth. As soon as you entrust people with respon­sible posi­tions, you should ask what inte­rests they really pursue.

7. Promote an entre­pre­neu­rial corpo­rate culture!

Many entre­pre­neurs have unde­re­sti­mated how important it is to create a good corpo­rate culture in which all employees have a common goal and act inde­pendently. They recom­mend retai­ning the best, if necessary giving notice to some staff and inve­sting in good team work. It is crucial to take the team into co-respon­si­bi­lity. Frank Breck­woldt, the founder of the Ryf Coif­feur Group, treated the heads of his hair­dres­sing salons too long as “reci­pi­ents of orders” and not as execu­tives. It would have been much better to give them right away a high degree of auto­nomy. His advice: promote self-initia­tives rather than centra­li­sing ever­ything. This creates “respon­si­bi­lity and trust, inspires and commits all involved.”

8. Focus on your strengths!

Entre­pre­neurs are people of action and not admi­ni­stra­tors. They like to build some­thing new with great passion, but after a while they embark on new projects. It can become preca­rious if over-opti­mi­stic entre­pre­neurs enter new areas. Some of them put their core busi­ness at risk. In retro­spect, they quote the old German saying “Cobbler, stick to your trade!” That is not a call to stick to the status quo, but the recom­men­da­tion not to neglect high quality and one‘s own strengths. The German Drugstore CEO Dirk Roßmann says: “It is better to focus on your core busi­ness than to force the impos­sible.”

9. Believe in yourself!

In order to survive in compe­ti­tive markets you need a high degree of resi­li­ence and the ability to assert yourself. People are not born with these charac­te­ri­stics. Some people start very cautiously. Many entre­pre­neurs regret that they came late to belie­ving in them­selves and to fighting for their ideas. In retro­spect, they encou­rage others to trust their gut feeling and act quickly in crises.

10. Leave the stage to others!

Whoever runs a company knows how diffi­cult it is to sepa­rate busi­ness matters and private life, in parti­cular when faced with a genera­tion change. Most entre­pre­neurs recom­mend trans­fer­ring respon­si­bi­lity to employees step by step, redu­cing the dange­rous depen­dence on one‘s own person. They recom­mend deve­lo­ping a succes­sion plan at an early stage, deci­ding on the best person avail­able – no matter where they come from. Leaving your own company too late makes it diffi­cult for the next genera­tion to find their role. In the worst case, the future of the company is at stake. A timely with­drawal also offers you the oppor­tu­nity to start new projects or to have more time for your private life. “Work does not run away from you when you show your child the rainbow,” Rosely Schweizer from the German Oetker family quotes a Chinese proverb, “but the rainbow does not wait for you to finish the work.”

The 10 lessons are taken from the book “My Biggest Mistake”, by NIKOLAUS FÖRSTER which is (unfor­tu­n­a­tely only) avail­able in German via: www.impulse.de/fehlerbuch

Nikolaus Förster

Dr. Niko­laus Förster is one of the leading busi­ness jour­na­lists and entre­pre­neurs. In 2013, he took over Germany’s leading entre­pre­neur maga­zine “impulse” and founded his own publi­shing house. In 2009, he became “impulse” editor-in-chief.